Vote Bundle Text (900124-19)

Amendments proposed to the Financial Services and Markets Bill, As Amended - continued	House of Commons

back to previous text

Dr Vincent Cable
Mr Brian Cotter
Mr Colin Breed

Page 195, line 30 [Clause 376], after 'Sections', insert '20,'.

NEW SCHEDULES

Insurance and banking business transfer schemes: certificates

Mr Chancellor of the Exchequer

NS1

To move the following Schedule—

'TRANSFER SCHEMES: CERTIFICATES

Part I

Insurance Business Transfer Schemes

1.—(1) For the purposes of section (Sanction of the court for business transfer schemes)(3) the appropriate certificates, in relation to an insurance business transfer scheme, are—

(a) a certificate under paragraph 2;

(b) if sub-paragraph (2) applies, a certificate under paragraph 3;

(d) if sub-paragraph (4) applies, a certificate under paragraph 5.

(2) This sub-paragraph applies if—

(a) the authorised person concerned is a UK authorised person which has received authorisation under Article 6 of the first life insurance directive or of the first non-life insurance directive from the Authority; and

(b) the establishment from which the business is to be transferred under the proposed insurance business transfer scheme is in an EEA State other than the United Kingdom.

(3) This sub-paragraph applies if—

(a) the authorised person concerned has received authorisation under Article 6 of the first life insurance directive from the Authority;

(b) the proposed transfer relates to long-term insurance business; and

(c) as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), an EEA State other than the United Kingdom is the State of the commitment.

(4) This sub-paragraph applies if—

(a) the authorised person concerned has received authorisation under Article 6 of the first non-life insurance directive from the Authority;

(b) the business to which the proposed insurance business transfer scheme relates is general insurance business; and

(c) as regards any policy which is included in the proposed transfer and which evidences a contract of insurance (other than reinsurance), the risk is situated in an EEA State other than the United Kingdom.

Certificates as to margin of solvency

2.—(1) A certificate under this paragraph is to be given—

(a) by the relevant authority; or

(b) in a case in which there is no relevant authority, given by the Authority.

(2) A certificate given under sub-paragraph (1)(a) is one certifying that, taking the proposed transfer into account—

(a) the transferee possesses, or will possess before the scheme takes effect, the necessary margin of solvency; or

(b) there is no necessary margin of solvency applicable to the transferee.

(3) A certificate under sub-paragraph (1)(b) is one certifying that the Authority has received from the authority which it considers to be the authority responsible for supervising insurance companies in the place to which the business is to be transferred that, taking the proposed transfer into account—

(a) the transferee possesses or will possess before the scheme takes effect the margin of solvency required under the law applicable in that place; or

(b) there is no such margin of solvency applicable to the transferee .

(4) "Necessary margin of solvency" means the margin of solvency required in relation to the transferee, taking the proposed transfer into account, under the law which it is the responsibility of the relevant authority to apply.

(5) "Margin of solvency" means the excess of the value of the assets of the transferee over the amount of its liabilities.

(6) "Relevant authority" means—

(a) if the transferee is an EEA firm falling within paragraph 5(d) of Schedule 3, its home state regulator;

(b) if the transferee is a Swiss general insurance company, the authority responsible for supervising insurance companies in Switzerland;

(7) In sub-paragraph (6), any reference to a transferee of a particular description includes a reference to a transferee who will be of that description if the proposed scheme takes effect.

(8) "Swiss general insurance company" means a company—

(a) whose head office is in Switzerland;

(b) which has permission to carry on regulated activities consisting of the effecting and carrying out of general insurance contracts; and

Certificates as to consent

3. A certificate under this paragraph is one given by the Authority and certifying that the host State regulator has been notified of the proposed scheme and that—

(a) that regulator has responded to the notification; or

(b) that it has not responded but the period of three months beginning with the notification has elapsed.

Certificates as to long-term business

4. A certificate under this paragraph is one given by the Authority and certifying that the authority responsible for supervising insurance companies in the State of the commitment has been notified of the proposed scheme and that—

(a) that authority has consented to the proposed scheme; or

(b) the period of three months beginning with the notification has elapsed and that authority has not refused its consent.

Certificates as to general business

5. A certificate under this paragraph is one given by the Authority and certifying that the authority responsible for supervising insurance companies in the EEA State in which the risk is situated has been notified of the proposed scheme and that—

(a) that authority has consented to the proposed scheme; or

(b) the period of three months beginning with the notification has elapsed and that authority has not refused its consent.

Interpretation of Part I

6.—(1) "State of the commitment", in relation to a commitment entered into at any date, means—

(a) if the policyholder is an individual, the State in which he had his habitual residence at that date;

(b) if the policyholder is not an individual, the State in which the establishment of the policyholder to which the commitment relates was situated at that date.

(2) "Commitment" means a commitment represented by insurance business of a prescribed class.

(3) References to the EEA State in which a risk is situated are—

(a) if the insurance relates to a building or to a building and its contents (so far as the contents are covered by the same policy), to the EEA State in which the building is situated;

(b) if the insurance relates to a vehicle of any type, to the EEA State of registration;

(c) in the case of policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), to the EEA State in which the policyholder took out the policy;

(d) in a case not covered by paragraphs (a) to (c)—

(i) if the policyholder is an individual, to the EEA State in which he has his habitual residence at the date when the contract is entered into; and

(ii) otherwise, to the EEA State in which the establishment of the policyholder to which the policy relates is situated at that date.

Part II

Banking Business Transfer Schemes

7.—(1) For the purposes of section (Sanction of the court for business transfer schemes)(3) the appropriate certificates, in relation to a banking business transfer scheme, are—

(a) a certificate under paragraph 8; and

(b) if sub-paragraph (2) applies, a certificate under paragraph 9.

(2) This sub-paragraph applies if the authorised person concerned or the transferee is an EEA firm falling within paragraph 5(b) of Schedule j05036.s.

Certificates as to financial resources

8.—(1) A certificate under this paragraph is one given by the relevant authority and certifying that, taking the proposed transfer into account, the transferee possesses, or will possess before the scheme takes effect, adequate financial resources.

(2) "Relevant authority" means—

(a) if the transferee is a person with a Part IV permission or with permission under Schedule j04188.s, the Authority;

(b) if the transferee is an EEA firm falling within paragraph 5(b) of Schedule j05036.s, its home state regulator;

(c) if the transferee does not fall within paragraph (a) or (b), the authority responsible for the supervision of the transferee's business in the place in which the transferee has its head office.

(3) In sub-paragraph (2), any reference to a transferee of a particular description of person includes a reference to a transferee who will be of that description if the proposed banking business transfer scheme takes effect.

Certificates as to consent of home state regulator

9. A certificate under this paragraph is one given by the Authority and certifying that the home State regulator of the authorised person concerned or of the transferee has been notified of the proposed scheme and that—

(a) the home State regulator has responded to the notification; or

(b) the period of three months beginning with the notification has elapsed.'.

Role of Competition Commission

Mr Chancellor of the Exchequer

NS2

To move the following Schedule—

'ROLE OF THE COMPETITION COMMISSION

Provision of information by Treasury

1.—(1) The Treasury's powers under this paragraph are to be exercised only for the purpose of assisting the Commission in carrying out an investigation under section (Consideration by Competition Commission).

(2) The Treasury may give to the Commission—

(a) any information in their possession which relates to matters falling within the scope of the investigation; and

(b) other assistance in relation to any such matters.

(3) In carrying out an investigation under section (Consideration by Competition Commission), the Commission must have regard to any information given to it under this paragraph.

Consideration of matters arising on a report

2. In considering any matter arising from a report made by the Director under section (Reports by Director General of Fair Trading), the Commission must have regard to—

(a) any representations made to it in connection with the matter by any person appearing to the Commission to have a substantial interest in the matter; and

(b) any cost benefit analysis prepared by the Authority (at any time) in connection with the regulatory provision or practice, or any of the regulatory provisions or practices, which are the subject of the report.

Applied provisions

3.—(1) The provisions mentioned in sub-paragraph (2) are to apply in relation to the functions of the Commission under section (Consideration by Competition Commission) as they apply in relation to the functions of the Commission in relation to a reference to the Commission under the Fair Trading Act 1973.

(2) The provisions are—

(a) section 82(2), (3) and (4) of the Fair Trading Act 1973 (general provisions about reports);

(b) section 85 of that Act (attendance of witnesses and production of documents);

(d) section 24 of the Competition Act 1980 (modifications of provisions about the performance of the Commission's functions);

(d) Part II of Schedule 7 to the Competition Act 1998 (performance by the Commission of its general functions).

(3) But the reference in paragraph 15(7)(b) in Schedule 7 to the 1998 Act to section 75(5) of that Act is to be read as a reference to the power of the Commission to decide not to make a report in accordance with section (Consideration by Competition Commission)(2).

Publication of reports

4.—(1) If the Commission makes a report under section (Consideration by Competition Commission), it must publish it in such a way as appears to it to be best calculated to bring it to the attention of the public.

(2) Before publishing the report the Commission must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual the publication of which, in the opinion of the Commission, would or might seriously and prejudicially affect his interests.

(3) Before publishing the report the Commission must, so far as practicable, also exclude any matter which relates to the affairs of a particular body the publication of which, in the opinion of the Commission, would or might seriously and prejudicially affect its interests.

(4) Sub-paragraphs (2) and (3) do not apply in relation to copies of a report which the Commission is required to send under section (Consideration by Competition Commission)(10).'.